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Nemiroff · Jan 18, 2008, 01:51 pm

The real estate market is on the verge of collapse, or so they've been saying for several years now.
If it does happen what do you think will happen? Cheap readily avialable houses and land for people who couldn't afford it? A significant drop in nationwide rent? Any difference between spacious small America and the overstuffed cities?

Dieval · Jan 18, 2008, 02:02 pm

It would be spectacular if rent were to come down...I'm paying a small fortune for my place....

shawmutt · Jan 18, 2008, 02:06 pm

On the verge? Brother, it's here. I lost about $45K in value with my house in less than two years, and I don't live in a high profile area.

...if only I waited two more years...

What will happen is house prices will fall, and mortgage interest rates will go up. Banks will get paid the same no matter what happens to the market.

Cephus · Jan 18, 2008, 03:48 pm

Yeah, but if you've owned your house for more than a couple years, you probably gained it in the inflated real estate boom. My house almost doubled in value and then dropped back down. Big deal. It was completely artificial, I didn't lose anything because I never really gained anything to begin with.

Nemiroff · Jan 18, 2008, 04:44 pm

I'm not so sure about rent dropping. It seems logical that if the value of the house/building drops, so should the price to rent in that house/building.

But if you look at it from a supply and demand standpoint, the demand will not drop, and is very large and growing rapidly. The supply is also large, but not growing nearly as fast. And obviously people are willing, reluctantly, to pay the current prices. It's really the homeowners who are gonna take the blow so why would they lower rent? If they end up needing to sell they're gonna get a lot less, so they might try even raising rent now to compensate.

Chaossaber314 · Jan 18, 2008, 06:01 pm

Quote:

Quote by: Nemiroff

I'm not so sure about rent dropping. It seems logical that if the value of the house/building drops, so should the price to rent in that house/building.

But if you look at it from a supply and demand standpoint, the demand will not drop, and is very large and growing rapidly. The supply is also large, but not growing nearly as fast. And obviously people are willing, reluctantly, to pay the current prices. It's really the homeowners who are gonna take the blow so why would they lower rent? If they end up needing to sell they're gonna get a lot less, so they might try even raising rent now to compensate.

Having just put down a double deposit on a duplex that's only moderately nice and further away from school than I would like, I think you just nailed it right on the head.

shawmutt · Jan 18, 2008, 06:28 pm

Quote:

Yeah, but if you've owned your house for more than a couple years, you probably gained it in the inflated real estate boom.

I wish that was the case. No, I bought it during the inflated real estate boom due to really bad advice from the in-laws (one of which is a CFO of a corporation) and a nagging pregnant wife. Hopefully it will recover a bit this spring.

tivodan1116 · Jan 18, 2008, 07:12 pm

Speaking as someone who lives in Upstate (Western) NY, I ask:

What real estate boom/bust???

Jan 18, 2008, 01:51 pm	#1 (permalink) (top)
Nemiroff Igneous Magma Posts: 354	real estate crash The real estate market is on the verge of collapse, or so they've been saying for several years now. If it does happen what do you think will happen? Cheap readily avialable houses and land for people who couldn't afford it? A significant drop in nationwide rent? Any difference between spacious small America and the overstuffed cities?

Jan 18, 2008, 02:02 pm	#2 (permalink) (top)
Dieval Right of Center Location: San Diego, CA Posts: 3,004	It would be spectacular if rent were to come down...I'm paying a small fortune for my place.... "You have enemies? Good. That means you've stood up for something, sometime in your life." -- Winston Churchill

Jan 18, 2008, 02:06 pm	#3 (permalink) (top)
shawmutt Slightly Dangerous Location: Greencastle, PA Posts: 1,334	On the verge? Brother, it's here. I lost about $45K in value with my house in less than two years, and I don't live in a high profile area. ...if only I waited two more years... What will happen is house prices will fall, and mortgage interest rates will go up. Banks will get paid the same no matter what happens to the market. I don't believe in polls, and 62% of Americans agree with me ~Steven Colbert

Jan 18, 2008, 03:48 pm	#4 (permalink) (top)
Cephus Hot Lava Location: Redlands, CA Posts: 2,347	Yeah, but if you've owned your house for more than a couple years, you probably gained it in the inflated real estate boom. My house almost doubled in value and then dropped back down. Big deal. It was completely artificial, I didn't lose anything because I never really gained anything to begin with. Jesus loves me? No thanks, I don't swing that way. Blog Me! http://BitchSpot.JadeDragonOnline.com

Jan 18, 2008, 07:12 pm	#8 (permalink) (top)
tivodan1116 Juris Doctor Location: NY Posts: 2,412	Speaking as someone who lives in Upstate (Western) NY, I ask: What real estate boom/bust??? "But it wasn't until he met his beautiful wife that he learned using logic and reason isn't enough. You have to be a dick to everyone who doesn't think like you." - South Park on Richard Dawkins

Jan 18, 2008, 04:44 pm	#5 (permalink) (top)
Nemiroff Igneous Magma Posts: 354	I'm not so sure about rent dropping. It seems logical that if the value of the house/building drops, so should the price to rent in that house/building. But if you look at it from a supply and demand standpoint, the demand will not drop, and is very large and growing rapidly. The supply is also large, but not growing nearly as fast. And obviously people are willing, reluctantly, to pay the current prices. It's really the homeowners who are gonna take the blow so why would they lower rent? If they end up needing to sell they're gonna get a lot less, so they might try even raising rent now to compensate.